Retailer Zalando set for record daily share price fall as growth outlook weighs
Zalando’s Growth Forecast and Market Reaction
By Linda Pasquini
BERLIN, Aug 4 (Reuters) - European online fashion retailer Zalando on Tuesday forecast 2026 revenue and growth to land in the lower half of its previously guided range and narrowed its adjusted operating profit outlook, sending its shares falling as much as 18%.
Lowered Growth Expectations
It now sees both annual gross merchandise volume and revenue growth in the lower half of its previous 12% to 17% range on a reported basis, a forecast it said reflects first-half performance rather than a change in expectations for the rest of the year.
Shares in the Berlin-based company were down 15% at 0821 GMT, set to wipe out all their gains for this year in a record daily drop.
Analyst Insights and Market Sentiment
Analysts at Deutsche Bank pointed to a weaker-than-expected underlying GMV and revenue performance in its retail business and concerns around a weaker consumer outlook as the reason for the dive in shares after a recent rally.
Customer Behaviour and Management Commentary
CUSTOMERS 'CAUTIOUS', 'PRICE-SENSITIVE', CFO SAYS
"The customer remains cautious and price-sensitive," CFO Anna Dimitrova told journalists in a call, without giving further details.
Second Quarter Performance and Category Trends
Second-quarter GMV grew 20.7% year-on-year to €4.9 billion ($5.64 billion) on a reported basis, aided by rapidly expanding AI capabilities. However, pro-forma growth unexpectedly slowed to 4.4% from 6% in the first quarter, Jefferies analysts said.
Category Weakness and Industry Comparisons
Zalando flagged softer first-half demand mainly in the sneaker category, echoing comments by German sportswear maker Adidas on Thursday that heavy discounting at many retailers in Europe was putting lifestyle footwear under pressure.
Pro-forma figures assume the consolidation of About You in the prior-year period.
Profit Outlook and Strategic Initiatives
CONSUMER SPENDING WEAK, COMPETITION INTENSE
Zalando now expects adjusted earnings before interest and tax of €680 million to €720 million, compared with its previous forecast of €660 million to €740 million.
Operational Efficiency and Growth Drivers
It said it has greater confidence in reaching the midpoint of the new range, supported by synergies from the acquisition of About You, expected second-half benefits from its logistics network overhaul, efficiency measures, and strong growth in its higher-margin partner, software, and retail media businesses.
Investments and Competitive Landscape
Zalando is investing in refining its customer offering, expanding AI initiatives and strengthening its European logistics network as it seeks to drive growth despite weak consumer spending and intense competition from low-cost fast-fashion players such as Shein.
($1 = 0.8690 euros)
(Reporting by Linda Pasquini; Editing by Miranda Murray and Sherry Jacob-Phillips)
